Kebab sales bypassing the tax office — tax evasion in kebab restaurants

As a kebab shop owner, you attract a multi­tude of satis­fied custo­mers to your estab­lish­ment daily. You main­tain your accoun­ting properly and fulfill your tax obli­ga­tions. But one day, the tax autho­ri­ties show up at your door with an alle­ga­tion of tax evasion, clai­ming that you did not accu­ra­tely record your reve­nues. Shocked and unsettled, you wonder – What can I do? In the follo­wing article, you will find all the rele­vant infor­ma­tion related to criminal law and tax law.

Tax evasion is an offense that can be pena­lized with heavy fines or even impri­son­ment. The first thing you should do, ther­e­fore, is to contact an attorney or a specia­list lawyer for criminal and tax law.

You need an expe­ri­enced legal repre­sen­ta­tive who will protect your rights and defend you against unju­s­ti­fied (or justi­fied) accu­sa­tions. An attorney specia­li­zing in criminal and tax law can help you assess the evidence, develop a defense stra­tegy, and nego­tiate with the autho­ri­ties. As the operator of a food estab­lish­ment, such as a kebab shop or restau­rant, you should turn to experts in tax evasion cases within the gastro­nomy sector.

Open cash registers often raise suspicion of tax evasion in the gastronomy sector.

A common cause for suspi­cion of tax evasion in kebab shops is the cash register system. Kebab stands often use so-called open cash registers—also known as drawer cash regis­ters. These are often simple cash regis­ters or drawers connected to a scale or calcu­lator. They are prima­rily used in small shops or food stands that handle many cash tran­sac­tions and have high customer traffic, such as kebab shops.

“An open cash register refers to a summa­ri­zing, retro­grade deter­mi­na­tion of daily receipts as well as manual indi­vi­dual recor­dings without the use of tech­nical aids.” (BMF letter dated 19.06.2018)

Unlike elec­tronic cash register systems, open cash regis­ters are operated enti­rely manu­ally and do not auto­ma­ti­cally record any data. This means they do not capture the details of each tran­sac­tion, such as the time, amount, items, or payment method.

However, open cash regis­ters must also comply with the prin­ciple of proper book­kee­ping (§ 158 AO). Every tran­sac­tion must be recorded imme­dia­tely and indi­vi­du­ally. Revenue and expenses should gene­rally be docu­mented compre­hen­si­vely and in as much detail as possible in daily reports and a cash book (see AEAO to § 146, No. 2.1.2 and 2.1.3.). Industry-specific conside­ra­tions and aspects of reason­ab­leness must also be taken into account (BMF letter dated 19.06.2018). The respec­tive records must allow an expert third party to conduct a thorough review of their basis, content, deve­lo­p­ment, execu­tion, and rele­vance for the busi­ness within a reasonable period (BMF letter dated 19.06.2018).

The problem with open cash regis­ters is that they often do not meet the high stan­dards required by the tax autho­ri­ties. The tax office mandates that all tran­sac­tions be recorded indi­vi­du­ally and in a veri­fiable manner to ensure that sales are correctly reported and taxed. If a busi­ness uses an open cash register, the tax office may assume that sales are not properly reported or are mani­pu­lated.

Addi­tio­nally, some elec­tronic cash regis­ters (point-of-sale systems) are sold and used with soft­ware that faci­li­tates tax evasion in the hospi­ta­lity industry. Such mani­pu­la­tion soft­ware can allow entries to be deleted retroac­tively, preven­ting them from being reported to the tax office, or mani­pu­lated receipts can be used to make adjus­t­ments in the booking system, alte­ring recorded sales post-entry.

Mani­pu­la­tion is often straight­for­ward: in some cases, a simple turn of the register key prevents subse­quent sales from being saved. Other methods involve chan­ging the number and/or value of recorded tran­sac­tions, enab­ling cancel­la­tions or redu­cing total daily sales while adjus­ting indi­vi­dual sales figures (so-called zapper programs). A popular feature is the “trai­ning waiter,” a ficti­tious func­tion within the register that excludes tran­sac­tions from the daily summary, thus omit­ting rele­vant revenue.

In cases of open cash regis­ters and mani­pu­lated elec­tronic systems, the tax office may esti­mate sales (§ 162 AO), which often results in inflated figures and signi­fi­cant tax back payments.

The tax autho­ri­ties also have the option of applying enforce­ment measures under § 328 AO or prose­cu­ting the taxpayer under § 379 (1) sentence 1 no. 1 and no. 3 AO.

Moreover, viola­tions of book­kee­ping obli­ga­tions can be prose­cuted under § 283 StGB and § 283b StGB.

Consult a lawyer if accused of tax evasion!

If you are suspected of tax evasion in the gastro­nomy sector, such as being accused as a kebab shop operator of using an open cash register or alleged by the tax office to have used a mani­pu­lated cash system and failed to report reve­nues correctly, you need a compe­tent and expe­ri­enced lawyer specia­li­zing in criminal and tax law by your side.

Our law firm, Mügge, Dr. Pitschel & Partner | MPP Rechts­an­wälte, highly specia­lized in tax and criminal law, poss­esses exten­sive exper­tise in the gastro­nomy industry.

For years, we have successfully repre­sented owners of kebab shops and other snack busi­nesses in the greater Göttingen area and cities such as Kassel, Hanover, Hildes­heim, and Braun­schweig. Due to our specia­liza­tion, we also operate throug­hout Germany, repre­sen­ting clients in cities such as Berlin, Hamburg, Munich, Frank­furt, Cologne, Stutt­gart, Dort­mund, Leipzig, Dresden, or Düssel­dorf.

Please do not hesi­tate to contact us. The law firm Mügge, Dr Pitschel & Partner | MPP Rechts­an­wälte is your reliable and profes­sional partner in all tax and criminal law matters.